Walter L. Medlin - Page 6

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          findings of fact and opinion are then set forth for each item of            
          unreported income.  Finally, we discuss whether the additions to            
          tax for fraud apply and whether assessment is barred by the                 
          statute of limitations.                                                     
                              GENERAL FINDINGS OF FACT                                
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein by this reference.  At the time of filing the           
          petition, petitioner resided in Kissimmee, Florida.                         
               Since the 1960s through the present, petitioner has been               
          engaged in the business of buying and selling real estate, as               
          well as real estate development.  Petitioner used Donna Allen               
          (Ms. Allen), Michael Johnson,3 and R. Stephen Miles, Jr. (Mr.               
          Miles), as trustees for the buying and selling of real estate.              
          Ms. Allen’s and Mr. Johnson’s only duties as trustees were to               
          hold title to the various properties in trust.                              
               Petitioner met Ms. Allen in 1971, and since 1974, she has              
          worked for petitioner as a bookkeeper, secretary, and                       
          housekeeper.  Petitioner and Ms. Allen had a child together in              
          1982.  The child lived with Ms. Allen from 1982 through 1990.               
          Petitioner agreed to pay child support of $50,000 per year to Ms.           
          Allen.  Since 1975, petitioner has given real property and two              



               3Michael Johnson was petitioner’s cousin.                              





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